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on Cognitive and Behavioural Economics |
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Issue of 2015‒07‒11
thirteen papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale “Amedeo Avogadro” |
| By: | Claudia Toma; Vincent Yzerbyt; Olivier Corneille; Stéphanie Demoulin |
| Abstract: | Previous research suggests competing hypotheses regarding the effect of power on social projection. The current research proposes that this effect depends on the characteristics to be projected, namely warmth and competence. In four studies, participants first rated themselves on a list of traits/preferences, they then performed a power manipulation task, and, finally, they rated a target person on the same list. Studies 1 and 2 found that high-power participants projected less than low-power participants on characteristics related to warmth. Studies 3 and 4 revealed an interaction between power and dimensions of judgment such that low-power participants projected less than high-power participants on competence whereas the reverse was found on warmth. The underlying cognitive and motivational mechanisms are discussed. |
| Keywords: | interpersonal projection; power; social distance; warmth; competence |
| Date: | 2015–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/206198&r=cbe |
| By: | Lopez Maria Claudia (Department of Community Sustainability, Michigan State University, MI USA); Munro Alistair (GRIPS); Tarazona-Gomez Marcela (Oxford Policy Management, United Kingdom) |
| Abstract: | A recurring and puzzling pattern with experiments on intra-household behaviour is the common failure of couples to attain the cooperative solution. Using married couples from a low income area of Bogota, Colombia we conduct an experiment that raises the salience of the family vis-à-vis outsiders. In this experiment husbands and wives play a repeated voluntary contribution game. At the same time each participant plays an identical game with one stranger in the same session. When investments to the common pools are made from separate and non-fungible budgets, most subjects contribute more to the household pool than the stranger pool, but rarely contribute everything to the household even after repetition and opportunities for learning. Efficiency is not obtained. However, when subjects make contributions to the two games from a single budget many individuals converge rapidly on a strategy of investing everything in the household pool and contributing little to the pool with a stranger. Overall the amount invested in some pool rises. Our results are in line with games played with individuals in which in-group cooperation is higher when membership of the group is more salient. They suggest that strengthening family identity may raise intrahousehold cooperation, but at the expense of cooperation of interhousehold cooperation. |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:ngi:dpaper:15-10&r=cbe |
| By: | Michela Tinelli; Zlatko Nikoloski; Stephanie Kumpunen; Cecile Knai; Radivoje Pribakovic Brinovec; Emily Warren; Katharina Wittgens; Petra Dickmann |
| Abstract: | Background: Health economics preference-based techniques, such as discrete choice experiments (DCEs), are often used to inform public health policy on patients’ priorities when choosing health care. Although there is general evidence about patients’ satisfaction with general-practice (GP) care in Europe, to our knowledge no comparisons are available that measure patients’ preferences in different European countries, and use patients’ priorities to propose policy changes. Methods: A DCE was designed and used to capture patients’ preferences for GP care in Germany, England and Slovenia. In the three countries, 841 eligible patients were identified across nine GP practices. The DCE questions compared multiple health-care practices (including their ‘current GP practice’), described by the following attributes: ‘information’ received from the GP, ‘booking time’, ‘waiting time’ in the GP practice, ‘listened to’, as well as being able to receive the ‘best care’ available for their condition. Results were compared across countries looking at the attributes’ importance and rankings, patients’ willingness-to-wait for unit changes to the attributes’ levels and changes in policy. Results: A total of 692 respondents (75% response rate) returned questionnaires suitable for analysis. In England and Slovenia, patients were satisfied with their ‘current practice’, but they valued changes to alternative practices. All attributes influenced decision-making, and ‘best care’ or ‘information’ were more valued than others. In Germany, almost all respondents constantly preferred their ‘current practice’, and other factors did not change their preference. Conclusion: European patients have strong preference for their ‘status quo’, but alternative GP practices could compensate for it and offer more valued care. |
| JEL: | J50 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:59576&r=cbe |
| By: | Guillen, Pablo.; Hakimov, Rustamdjan. |
| Abstract: | We run a field experiment to test the truth-telling rates of the theoretically strategy-proof Top Trading Cycles mechanism (TTC) under different information conditions. First, we asked first-year economics students enrolled in an introductory microeconomics unit about which topic, among three, they would most like to write an essay about. Most students chose the same favorite topic. Then we used TTC to distribute students equally across the three options. We ran three treatments varying the information the students received about the mechanism. In the first treatment students were given a description of the matching mechanism. In the second they received a description of the strategy-proofness of the mechanism without details of the mechanism. Finally, in the third they were given both pieces of information. We find a significant and positive effect of describing the strategy-proofness on truth-telling rates. ON the other hand, describing the matching mechanism has a significant and negative effect on truth-telling rates. |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:syd:wpaper:2015-16.&r=cbe |
| By: | Sarah Dahmann |
| Abstract: | This paper investigates two mechanisms through which education may affect cognitive skills in adolescence: the role of instructional quantity and the timing ofinstruction with respect to age. To identify causal effects, I exploit a school reform carried out at the state level in Germany as a quasi-natural experiment: between 2001 and 2007, the academic-track high school (Gymnasium) was reduced by one year in most of Germany's federal states, leaving the overall curriculum unchanged. To investigate the impact of this educational change on students' cognitive abilities, I conduct two separate analyses: first, I exploit the variation in the curriculum taught to same-aged students at academic-track high school over time and across states to identify the effect of the increase in class hours on students' crystallized and fluid intelligence scores. Using rich data on seventeen year-old adolescents from the German Socio-Economic Panel (SOEP) study, the estimates show that fluid intelligence remained unaffected, while crystallized intelligence improved for male students. Second, I compare students' competences in their final year of high school using data from the German National Educational Panel Study (NEPS). The results suggest that students affected by the reform catch up with their non-affected counterparts in terms of their competences by the time of graduation. However, they do not provide any evidence for the timing of instruction to matter in cognitive skill formation. Overall, secondary education therefore seems to impact students'cognitive skills in adolescence especially through instructional time and not so much through age-distinct timing of instruction. |
| Keywords: | Cognitive Skills, Crystallized Intelligence, Fluid Intelligence, Skill Formation, Education, High School Reform |
| JEL: | I21 I28 J24 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp769&r=cbe |
| By: | Mounir Karadja (Institute of International Economic Studies, Stockholm University); Johanna Mollerstrom (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); David Seim (Department of Economics, University of Toronto) |
| Abstract: | We study the extent to which people are misinformed about their relative position in the income distribution and the effects on preferences for redistribution of correcting faulty beliefs. We implement a tailor-made survey in Sweden and document that a vast majority of Swedes believe that they are poorer, relative to others, than they actually are. This is true across groups, but younger, poorer, less cognitively able and less educated individuals have perceptions that are further from reality. Using a second survey, we conduct an experiment by randomly informing a subsample about their true relative income position. Respondents who learn that they are richer than they thought demand less redistribution and increase their support for the Conservative Party. This result is entirely driven by prior right-of-center political preferences and not by altruism or moral values about redistribution. Moreover, the effect can be reconciled by people with political preferences to the right-of-center being more likely to view taxes as distortive and believe that it is personal effort rather than luck that is most influential for individual economic success. Length: 48 |
| Keywords: | fairness, responsibility, option luck, brute luck, experiment |
| JEL: | C91 D63 D81 H23 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:gms:wpaper:1050&r=cbe |
| By: | Crosetto, P.; Muller, L.; Ruffieux, B. |
| Abstract: | This paper contributes to the debate on front-of-pack nutritional labels. Because of their dissimilar formats, Guideline Daily Amount (GDA) and Traffic Light (TL) may trigger different responses among consumers. While GDA is comprehensive and cognitively demanding, information is coarser and more salient in TL. We implement an incentivized laboratory experiment to assess the relative performance of GDA and TL labelling schemes in assisting consumers to build a healthy daily diet. Participants must compose a daily diet, choosing from a finite set of products, and are paid a fixed cash amount only if the diet satisfies pre-determined nutritional goals. Goals correspond to the guideline daily amount values for different nutritional attributes, whose number varies from 1 (kcal) to 7 (kcal, fat, sugar, salt, fibre, vitamin C and calcium). Three different labels, GDA, TL and a combined GDATL are provided. Results show that GDA performs better than TL when subjects do not face time constraints. When time is limited however, TL and GDA have identical efficacy with 4 nutritional goals, and TL even outperforms GDA with 7 nutritional goals. |
| Keywords: | NUTRITIONAL LABELS;FOOD CHOICE;EXPERIMENTAL ECONOMICS;GUIDELINE DAILY AMOUNT;TRAFFIC LIGHTS |
| JEL: | D12 D18 C91 C93 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:gbl:wpaper:2015-10&r=cbe |
| By: | Arup Daripa (Department of Economics, Mathematics & Statistics, Birkbeck) |
| Abstract: | We study repayment incentives generated through social sanctions and under pure in- dividual liability. In our model agents are heterogeneous, with differing degrees of risk aversion. We consider a simple setting in which agents might strategically default from a loan program. We remove the usual assumption of exogenous social penalties, and consider the endogenous penalty of exclusion from an underlying social cooperation game, modeled here as social risk-sharing. For some types of agents social risk-sharing can be sustained by the threat of exclusion from this arrangement. These types have social capital and can be given a loan that bootstraps on the risk-sharing game by using the threat of exclusion from social risk-sharing to deter strategic default. We show that the use of such sanctions can only cover a fraction of types participating in social risk sharing. Further, coverage is decreasing in loan duration. We then show that an individual loan programaugmented by a compulsory illiquid savings plan (such schemes are used by the Grameen Bank) can deliver greater coverage, and can even cover types excluded from social risk-sharing (i.e. types for whom social penalties are not available at all). Further, the coverage of an individual loan program has the desirable property of increasing with loan size as well as loan duration. Finally, we show that social cooperation enhances the performance of individual loans. Thus fostering social cooperation is beneficial under individual liability loans even though it has limited usefulness as a penalty under social enforcement of repayment. The results offer an explanation for the Grameen Bank’s adoption of individual liability replacing group liability in its loan programs since 2002. |
| Keywords: | Strategic default, social cooperation, social penalties, individual liability, loan coverage, loan duration, loan size. |
| JEL: | O12 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:bbk:bbkefp:1509&r=cbe |
| By: | Daniel R. Burghart; Thomas Epper; Ernst Fehr |
| Abstract: | The probability triangle (also called the Marschak-Machina triangle) allows for compact and intuitive depictions of risk preferences. Here, we develop an analogous tool for choice under uncertainty - the ambiguity triangle - and show that indifference curves in this triangle capture preferences for unknown probabilities. In particular, the ambiguity triangle allows us to examine whether subjects adhere to the generalized axiom of revealed preference (GARP) and satisfy a non-parametric test for constant ambiguity attitudes. We find that more than 95% of subjects adhere to GARP and that about 60% satisfy our test for a constant ambiguity attitude. Yet, among these 60% of subjects there is substantial preference heterogeneity. We characterize this heterogeneity with finite-mixture estimates of a one-parameter extension of Expected Utility Theory wherein 48% of subjects are ambiguity averse, 22% are ambiguity seeking, and 30% are close to ambiguity neutral. The ambiguity triangle also highlights how variable ambiguity attitudes arise mainly because indifference curves are ’fanning-in’ across the triangle. This fanning-in property implies that aversion to ambiguity increases as the likelihood of receiving a good outcome increases. We capture this behavior with a simple parametric model that also allows for finite mixture characterizations of preference heterogeneity for these subjects. We show that for a substantial share of these subjects (43%) their fanning-in is so strong that, although they are initially ambiguity seeking, they become strongly ambiguity averse as the likelihood of receiving a good outcome increases. |
| Keywords: | Behavior under uncertainty, ambiguity preferences, heterogeneity, probability triangle, ambiguity triangle |
| JEL: | D81 C91 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:196&r=cbe |
| By: | Michael Beckmann; Thomas Cornelissen; Matthias Kräkel |
| Abstract: | This paper theoretically and empirically examines the impact of self-managed working time (SMWT) on employee effort. As a means of increased worker autonomy, SMWT can theoretically increase effort via intrinsic motivation and reciprocal behaviour, but can lead to a decrease of effort due to a loss of control. Based on German individual-level panel data, we find that SMWT employees exert higher effort levels than employees with fixed working hours. Even after accounting for observed and unobserved characteristics there remains a modest positive effect. This effect is mainly driven by employees who are intrinsically motivated, suggesting that intrinsic motivation is complementary to SMWT. However, reciprocal work intensification does not seem to be an important channel of providing extra effort. |
| Keywords: | Self-managed working time, worker autonomy, employee effort, reciprocity, intrinsic motivation, complementarity |
| JEL: | J24 J81 M50 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp768&r=cbe |
| By: | Burghart, Daniel R. (University of Zurich); Epper, Thomas (University of St. Gallen); Fehr, Ernst (University of Zurich) |
| Abstract: | The probability triangle (also called the Marschak-Machina triangle) allows for compact and intuitive depictions of risk preferences. Here, we develop an analogous tool for choice under uncertainty – the ambiguity triangle – and show that indifference curves in this triangle capture preferences for unknown probabilities. In particular, the ambiguity triangle allows us to examine whether subjects adhere to the generalized axiom of revealed preference (GARP) and satisfy a non-parametric test for constant ambiguity attitudes. We find that more than 95% of subjects adhere to GARP and that about 60% satisfy our test for a constant ambiguity attitude. Yet, among these 60% of subjects there is substantial preference heterogeneity. We characterize this heterogeneity with finite-mixture estimates of a one-parameter extension of Expected Utility Theory wherein 48% of subjects are ambiguity averse, 22% are ambiguity seeking, and 30% are close to ambiguity neutral. The ambiguity triangle also highlights how variable ambiguity attitudes arise mainly because indifference curves are 'fanning-in' across the triangle. This fanning-in property implies that aversion to ambiguity increases as the likelihood of receiving a good outcome increases. We capture this behavior with a simple parametric model that also allows for finite mixture characterizations of preference heterogeneity for these subjects. We show that for a substantial share of these subjects (43%) their fanning-in is so strong that, although they are initially ambiguity seeking, they become strongly ambiguity averse as the likelihood of receiving a good outcome increases. |
| Keywords: | uncertainty, risk preferences |
| JEL: | D81 C91 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9150&r=cbe |
| By: | Brueggemann, Julia; Meub, Lukas |
| Abstract: | Economic research on innovation has long discussed which policy instruments best foster innovativeness in individuals and organizations. One of the instruments easily accessible to policy-makers is innovation contests; however, there is ambiguous empirical evidence concerning how such contests should be designed. Our experimental study provides evidence by analyzing the effects of two different innovation contests on subjects´ innovativeness: a prize for the aggregate innovativeness and a prize for the best innovation. We implement a creative real effort task simulating a sequential innovation process, whereby subjects determine royalty fees for their created products, which also serve as a measure of cooperation. We find that both contest conditions reduce the willingness to cooperate between subjects compared to a benchmark condition without an innovation contest. However, the total innovation activity is not influenced by introducing innovation contest schemes. From a policy perspective, the implementation of state-subsidized innovation contests in addition to the existing intellectual property rights system should be questioned. |
| Keywords: | innovation prizes,competition,laboratory experiment,real effort task,creativity,innovation policy |
| JEL: | C91 D89 O31 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:251&r=cbe |
| By: | Tom Horlick-Jones; Jonathan Rosenhead |
| Abstract: | Ambiguity, the existence of multiple plausible (though possibly contested) ways of making sense of the characteristics of decision situations, can present significant difficulties for a wide range of risk management tasks. We will argue that ambiguity is present in risk management situations to a far greater extent that is commonly appreciated. The concept of ambiguity has arisen in different forms across disciplinary literatures and domains of practice. In this paper, we situate our experience of finding ways of supporting planning and decision-making processes concerned with ambiguous risks in the context of those wider perspectives. Our own efforts have employed a hybrid form of problem structuring methods (drawn from operational research and management science) and ethnography (drawn from sociology and anthropology). These engagements with organisational and inter-organisational risk management issues have led us to recognise that ‘untangling’ otherwise intractable risk management problems may be regarded, in some sense, as a therapeutic process. In this paper, we develop this therapeutic interpretation of the untangling of collective ambiguities using illustrations from a concrete problem situation. We set this therapeutic reading of decision processes in the context of wider perspectives, including those drawn from Habermas’ theorisation of communication, the sociology of science and the literature on citizen engagement and deliberation processes. |
| Keywords: | organizational risk management; ambiguity; uncertainty; plural rationalities; ethnomethodology; problem structuring methods; practical reasoning; the metaphor of psychotherapy; engagement; transdisciplinarity |
| JEL: | J50 G32 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:62497&r=cbe |